Crony Capitalism

Proterra’s Inoperable Electric Buses: a Costly Failure

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Electric Bus HellBrooks Agnew – Proterra, which President Joe Biden once said was “making me look good,” sold hundreds of electric buses to municipalities across North America. Every transit district, except one, has inoperable buses awaiting repairs. Remember the last DOE boondoggle with Solyndra? That was $500 million thrown straight up a horse’s ass. This is worse.

Across the country, towns and cities of various sizes envisioned an electrified public transit system that could shuttle residents with vehicles that produced no carbon-filled exhaust. Continue reading →

You Can’t Separate Empire, the State, Financialization and Crony Capitalism: It’s One Indivisible System

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systemCharles Hugh Smith – Disagreement is part of discourse, and pursuing differing views of the best way forward is the heart of democracy. Disagreement is abundant, democracy is scarce, despite claims to the contrary.

If you think you can surgically extract Empire from the American System, force the State to serve the working/middle classes, end the stripmining of financialization, limit crony capitalism/regulatory capture and get Big Money out of politics–go ahead and do so. I’m not standing in your way–go for it. Continue reading →

Crony Capitalism Is Kryptonite To Democracy And The Real Economy

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“When the machinery of governance is ruled by the highest bidders, democracy is dead.” – C H Smith

CharlesHughSmithLast week I described the sources of America’s America’s terminal political dysfunction. The engine of this terminal dysfunction is crony capitalism, the incestuous and oh-so-profitable marriage of the Central State and monied Elites.

Gordon T. Long and I continue our discussion of the perverse incentives and consequences of crony capitalism in a 25-minute video program.

Gordon argues that America’s Crony Capitalism closely resembles the Roman Tribute System, an arrangement that skims wealth and concentrates it at the top of the power pyramid.

Vast financial crimes are met with fines. Guilty parties do not go to jail but rather the corporation pays a fine. Billion-dollar crimes are assessed million-dollar fines– a percentage that closely mirrors a Tribute System. The government makes money through enforcement but not prevention. Corporations make illicit fortunes with the confidence that the government will settle for a small slice of the wealth stripmined from the people.

The fines for financial skimming operations act as a form of tribute to the Central State: the State and its corrupt elected officials and regulators turn a blind eye to the pillage of the citizenry via financialization schemes, and then skim a tribute via fines and campaign contributions. Continue reading →

Why Has Classical Capitalism Devolved To Crony-Capitalism?

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CharlesHughSmithHere is the quote that perfectly captures our era: “People of privilege will always risk their complete destruction rather than surrender any material part of their advantage.” (John Kenneth Galbraith) The trick, of course, is to mask the unspoken second half of of that statement: everybody else gets destroyed along with the Elites when the system implodes.

Union pension funds: toast. Government employees’ pension funds: toast. 401Ks: toast. IRAs: toast. The echo-bubble in housing: toast. The Fed’s favorite PR cover to cloak the enrichment of their financier cronies, the wealth effect:toast.

The primary tool the Elites use to mask the risk of complete destruction is magical thinking–specifically, that “given enough time, the system will heal itself.”

That’s rich, considering that the Elites’ primary tool of avoiding destruction is crippling the market’s self-healing immune system: price discovery. Thanks to ceaseless interventions by central banks, the price discovery mechanism has been shattered: want to know the price of risk? It’s near-zero. Yield on sovereign bonds? Near-zero. And so on. Continue reading →

Crony Capitalism

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TheOutsiderClub September 26 2013

Make no mistake; I’m a big fan of capitalism.

Since grade school, I’ve harbored a competitive nature. My siblings have always given me a hard time for being an overachiever.

And despite everything I think is wrong with our “competitive capitalistic economy,” I still believe good, healthy competition brings out the best people have to offer.

I believe hard work should be rewarded and success shouldn’t come easily — but when it does, it should come freely and naturally, not through some sort of manipulative scheme that keeps you on top by preventing everyone else from climbing.

Unfortunately, this is no longer the case…

Since the 1997 Asian financial crisis, the world has begun to awaken to the troubles of modern-day capitalism, better known as “crony capitalism.”

Free Market

The world finally broke free of the chains of tyranny and a life determined solely by one’s predisposition in the 18th century… yet somehow, we’ve managed to take a lot of wrong turns in the centuries that followed.

We’ve regressed to the state we once fought so hard to escape in the spirit of revolution, and our once celebrated free market is under attack from within.

The brilliance behind a free market mentality is that each individual has an opportunity to channel the power vested within to climb the social, economic, and professional ladder.

This is a powerful thing. It’s incentive to really strive for your goals… to make something of yourself… to dream something, and to do it — without jumping through obnoxious, unnecessary hoops and getting tied up in all that red tape.

A free market mentality means being born poor doesn’t have to be a death sentence. Instead, it could be a character-building obstacle course, a breeding ground for innovation and advancement. When we see individuals overcoming poverty, we’re generally experiencing economic growth as a whole.

We cheer one another on, because we all benefit from this progression.

Unless, of course, that economic capital is stolen by one’s “rulers or their friends or allies,” according to Hunter Lewis, author of Crony Capitalism and former CEO of Cambridge Associates…

Government Takeover

Continue reading →